We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Who will accept a DB to SIPP transfer from "insistent client"

Options
1192022242541

Comments

  • xylophone said:

    You seem to think that it does contain that, or were you intending to make that assertion in your own name?

    It seems to me that it very much accords with the position set out in government/parliamentary publications referenced here

    https://forums.moneysavingexpert.com/discussion/comment/78391950/#Comment_78391950

    Concerning DB pensions, Why would one attempt to backfit the intentions of legislators in 2014 via an independent 2020 report  focussed on DC pensions?
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 11 June 2021 at 8:59PM
    xylophone said:

    You seem to think that it does contain that, or were you intending to make that assertion in your own name?

    It seems to me that it very much accords with the position set out in government/parliamentary publications referenced here

    https://forums.moneysavingexpert.com/discussion/comment/78391950/#Comment_78391950

    Which unfortunately is not always consistent with the Act itself, which contains such important things for DB transfers as Clause 13: Early leavers: transfer values which sets out in law how DB CETVs are to be calculated, a key part of DB pension freedoms.

    There's no doubt that a great deal of the Act was about DC but there was also plenty about DB that shouldn't be ignored or asserted not to exist. And of course there seems little reason to doubt that the DC part greatly encouraged DB transfers as DB members recognised the large improvements made possible in their own position.

    Meanwhile your post does nothing to suggest that the reference given supported in any way the content that you seem to have claimed it contained. Do you accept that the story did not in fact say that the freedoms were aimed primarily at those who had DC pensions?

  • xylophone
    xylophone Posts: 45,604 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Meanwhile your post does nothing to suggest that the reference given supported in any way the content that you seem to have claimed it contained. Do you accept that the story did not in fact say that the freedoms were aimed primarily at those who had DC pensions?

    From the article



    Before this, tax restrictions ensured that most of the 400,000 people retiring each year were shunted into annuities — products sold by insurers which turn a pension pot into a secure retirement income for life. In the wake of the financial crisis, these had become poor value as looser monetary policy drove annuity rates to record lows.  “Let me be clear. No one will have to buy an annuity,” declared George Osborne, the former chancellor, when he unveiled the biggest changes to pensions in decades in his 2014 Budget. 

    The article does not explicitly say that the reforms were aimed at DC pensioners - but the above accords with

    https://commonslibrary.parliament.uk/research-briefings/cbp-8848/

    ‘Pension freedom’ reforms were introduced in April 2015 to give people aged 55 and over more flexibility about when and how to draw their defined contribution (DC) pension savings.

    They were not aimed at people with defined benefit (DB) pensions, for whom staying in their scheme was likely to be in their best interest. This is because a DB scheme provides index-linked benefits based on salary and length of service, whereas in a DC scheme your future pension income cannot be predicted with much certainty.

    Surely the point of the reforms was primarily to give all DC pensioners more choice over how they used their pension savings? 


  • Silvertabby
    Silvertabby Posts: 10,102 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    edited 11 June 2021 at 11:10PM
    xylophone said:
    Meanwhile your post does nothing to suggest that the reference given supported in any way the content that you seem to have claimed it contained. Do you accept that the story did not in fact say that the freedoms were aimed primarily at those who had DC pensions?

    From the article



    Before this, tax restrictions ensured that most of the 400,000 people retiring each year were shunted into annuities — products sold by insurers which turn a pension pot into a secure retirement income for life. In the wake of the financial crisis, these had become poor value as looser monetary policy drove annuity rates to record lows.  “Let me be clear. No one will have to buy an annuity,” declared George Osborne, the former chancellor, when he unveiled the biggest changes to pensions in decades in his 2014 Budget. 

    The article does not explicitly say that the reforms were aimed at DC pensioners - but the above accords with

    https://commonslibrary.parliament.uk/research-briefings/cbp-8848/

    ‘Pension freedom’ reforms were introduced in April 2015 to give people aged 55 and over more flexibility about when and how to draw their defined contribution (DC) pension savings.

    They were not aimed at people with defined benefit (DB) pensions, for whom staying in their scheme was likely to be in their best interest. This is because a DB scheme provides index-linked benefits based on salary and length of service, whereas in a DC scheme your future pension income cannot be predicted with much certainty.

    Surely the point of the reforms was primarily to give all DC pensioners more choice over how they used their pension savings? 


    This.  I suspect that the authors of the reforms assumed that very few DB pension fund members would be interested in banging out of their 'gold plated' schemes.
    I can't speak for the other public sector schemes, but the LGPS 'phones went into melt down with both current and deferred members wanting their money.  Now.  Hence the subsequent ban on transfers out from non-funded public sector schemes, because of the immense and immediate drain of public funds. 



  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I agree that it was the biggest area of the legislation but that's not the primary point on which I'm currently enquiring, why what you appeared to be asserting said something didn't in fact say it. "Sorry, wrong reference" or similar wording seems to be the best way for you to proceed since we all make mistakes from time to time and there's clearly considerable agreement about what things the law contained.
  • xylophone
    xylophone Posts: 45,604 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    "Sorry, wrong reference" or similar wording seems to be the best way for you to proceed

    But it wasn't the wrong reference!

    I  chose to use the article  to illustrate the point that the legislation was primarily aimed at those with DC pensions!

  • Gordy01 said:
    Prism said:
    Gordy01 said:
    If AJ Bell are out of the picture, and noting suggestions earlier in the thread to go the Stakeholder Pension route (maybe), but has anyone identified any other pension provider, or route, to be able to transfer a DB to, as an insistent client?
    thank you.
    20 pages and nobody has provided a definitive answer yet. A few people are assuming there is still a possible route but until somebody takes the plunge and reports back we just don't know. 
    I’m waiting to hear back from XPS Self Invested Pensions (I think mentioned very early in the thread as “Xafinity”, but undergone recent name change), and Fidelity, as I already have a current Stakeholder Pension running with them, and want to hear what they have to say (In terms of a Fidelity SIPP it’s a “no” to Insistent Clients).  I’ll keep you posted.
    Have you tried Minerva ? ( just a stab in the dark really )
    By Minerva, do you mean Minerva SIPP by InvestAcc (based in Carlisle)?

    If so, their Transfer Ts&Cs state the following:
    “Does the transfer include funds held in any type of occupational pension scheme and / or include any safeguarded benefits such as guarantees, defined benefits or derive from a cash balance arrangement?
    Yes No
    If ‘Yes’, we cannot accept the transfer unless you have received financial advice which positively recommends this transfer.”

    So that appears unlikely to offer an option for a DB transfer, but thank you for the suggestion.

  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    xylophone said:
    "Sorry, wrong reference" or similar wording seems to be the best way for you to proceed

    But it wasn't the wrong reference!

    I  chose to use the article  to illustrate the point that the legislation was primarily aimed at those with DC pensions!

    You picked a story that only covered the DC aspects and said nothing about DB. Which means nothing other than you picked a story about the DC by. Either of us could as easily pick a story about the DB transfer issues and claim that the Act was mainly about DB just because DB was what the story covered.

    To be useful for your supposed purpose a story needs to actually compare what the Act did for both types. DC in the Act gets quite a bit of coverage so stocking to the Act it might be manageable. But in effects it's a lot tougher because:

    On DC the need to buy an annuity had already been removed but the Act made drawdown using just pension money at younger ages far easier by scrapping the GAD limit. And no GAD limit and no annuity needed publicity finally got the message through that abilities weren't needed, with a resulting huge drop in annuity sales that is unlikely to recover while gilt yields are below 4-5%, at which point they can compete better with drawdown jnvome levels.

    On the DB side there was a huge surge in transfers as people with even quite modest risk tolerance realised that current transfer levels meant they could retire sooner with more income by doing it. The Act anticipated some of this by including provisions allowing the Treasury to block transfers out of unfunded public schemes, which it promptly did, actually reducing flexibility for members of those schemes.

    But overall I agree with DC being the more important part because I think it was removal of the GAD limit and finally getting the no annuity message through which greatly increased the benefit and affordability of transferring, which was so greatly stimulated only because of the combination of that and low gilt yields.

    Before the Act the GAD limited the drawing rate so you'd need lots of non-pension money to get a level income throughout retirement. No GAD let's you draw more in the early years to facilitate that as well as drawing on capital to replace the state pension that you're not yet getting. And that vastly expanded the pool of DB beneficiaries to include those without substantial non-pension assets. Private sector using DC could already run the numbers and see that they would need substantial ISA or other non-pension money and were likely to have less of their money committed to just one pension as a sole plus state pension plan.

    So for DB we ended up with a happy combination of high transfer values and sufficient flexibility in drawing rates from pensions to allow radical improvements in likely outcomes for those who aren't at the very risk-averse end of the spectrum, with risk reduction by state pension deferral and some annuity purchasing readily available.
     
    If the DB changes had happened with 5% gilt yields we'd have seen nothing close to the level of transfer stimulus that there is now. But gilt yields are low and hugely increase the benefit of transferring from the private sector now compared to say 2005-2009, partly because safe withdrawal levels haven't changed by virtue of already providing for worst cases.

    With most of the private sector DB pension liabilities now in payment and not available for  transfer this is a bit of a self-limiting situation as eligible private sector DB pensions gradually vanish. Public sector DB limit it to quite a degree with lower transfer values.

    A big and sustained for several years market drop combined with current gilt yields would produce even higher stimulus by letting investments be bought more cheaply and raising the lower bound for safe withdrawal rates, allowing more income from the same transferred capital. That's the sort of stimulus needed to more greatly increase transfers from public sector schemes with low transfer rates, unless those rates also decrease greatly.
  • candie01
    candie01 Posts: 51 Forumite
    10 Posts
    Prism said:
    xylophone said:
    finding the pension providers who are willing.
    They've all been doing their own research? :)
    https://www.ftadviser.com/pensions/2020/12/14/adviser-to-refund-fee-over-insistent-client-sipp-transfer/
    This case is from 2011.
    Well the transfer was 2011. It doesn't say when the case was from but the article is from December 2020. So several years after the advisor helped transfer an insistent client, and after that client lost their money, they got taken to court. Thats the risk so its no wonder advisors are avoiding this.
    But they were only fined £1000, not much!
  • candie01
    candie01 Posts: 51 Forumite
    10 Posts
    AaronEP said:
    Hi. Thanks for all your comments - this has been very helpful. I've been reading as many threads re DB transfers as I can, but still left with a query. If my IFA recommends not to transfer & I then become an insistent client the Advisor has said they would provide the section 48 declaration (confirming I've taken financial advice) but would not assist with the transfer.
    May I ask who is your IFA? This outcome would suit me.

    Can you message me with the details if you financial adviser please?
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.8K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.8K Work, Benefits & Business
  • 598.7K Mortgages, Homes & Bills
  • 176.8K Life & Family
  • 257.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.